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  • Edición impresa de Noviembre 21, 2017.

NAFTA, THE CROSS-BORDER DISASTER

As the talks to renegotiate NAFTA unfold in Washington, most attention in the United States has understandably focused on its domestic impact. Yet the treaty also had an enormous effect on Mexico, spurring a wave of forced migration of millions of people. Today a growing number of union members in all three NAFTA countries believe the treaty should be renegotiated-first, just to heal the damage done to workers. But a new treaty, or a new relationship between Mexico, the U.S., and Canada, they say, should also ensure that a new NAFTA and other treaties like it never cause the same devastation.

Like the other trade agreements of our age, NAFTA is not really about trade. U.S. tariffs on Mexican imports were relatively low before it went into effect. In actuality, the treaty is an agreement to allow market penetration and investment, the relocation of production and the creation of supply chains in manufacturing. Up until the mid-1980s, Mexico had a very protective policy that restricted foreign investment and controlled the exchange rate to encourage domestic growth. A sharp shift in the late 1980s included market opening measures, privatization, and economic reforms. These reforms were accelerated by NAFTA’s provisions on foreign investment.

NAFTA produced an increase in U.S. investment in auto plants, electronics and garment factories, meatpacking plants, and other enterprises. Foreign direct investment rose from $17 billion in 1994 to $104 billion in 2012. U.S. companies-not only in manufacturing-expanded into Mexico generally, using economic reforms and privatization as their wedge. Walmart became Mexico’s largest private-sector employer. Union Pacific and Grupo Mexico bought up the nation’s railroads and ended passenger service (which Union Pacific had long since ended in the U.S.).

Big Mexican capital also moved into the U.S., where Mexican investment last year reached $16 billion-the level of U.S. investment in Mexico in 1994, when NAFTA went into effect. A number of these corporations brought with them the anti-worker policies they had honed at home. Grupo Mexico, which began as the Mexican subsidiary of American Smelting and Refining Company (ASARCO), grew larger than the parent. Directed by the Larrea family, it bought out the U.S. stockholders, making it the owner of mines in Arizona and the Southwest, where it is now trying to enforce the same union-destroying cuts on U.S. miners that it imposed in in its Mexican mines, Cananea and Nacozari. El Super, a division of the Mexican Chedraui retail corporation, has become a large supermarket chain in southern California, fighting with the UFCW (the leading union of supermarket workers) and trying to operate as many stores without unions as it can.

A U.S. autoworker earns $21.50 an hour, and a Mexican autoworker $3, but a gallon of milk costs more in Mexico than it does here. It takes a Mexican autoworker over an hour’s work to buy a pound of hamburger, while a worker in Detroit can buy it after 10 minutes. That doesn’t mean that the Mexican workers are less productive: Mexican workers in the General Motors plant making the Sonic, Silverado, and Sierra produce the same number of cars per hour that the workers do in the U.S. plant making the same models. The difference means profit for GM, poverty for Mexican workers, and the migration from Mexico to the U.S. of those who can’t survive.

The treaty forced yellow corn grown by Mexican farmers without subsidies to compete in Mexico’s own market with corn from huge U.S. producers, subsidized by the U.S. farm bill. Corn imports rose from two million tons to more than ten million tons from 1992 to 2008. NAFTA prohibited price supports, without which hundreds of thousands of small farmers found it impossible to sell their corn or other farm products for what it cost to produce them. Mexico imported 30,000 tons of pork in 1995, and by 2010 that had grown to 811,000 tons, costing 120,000 jobs.

 

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Zacarias Salazar plows his cornfield in Juxtlahuaca, Oaxaca, behind oxen, in the traditional way with a wooden plow.  Because of corn dumping enabled by the North American Free Trade Agreement, it is almost impossible for Salazar to grow and sell corn in Mexico any longer, and his crop is now mostly for the sustenance of his family.

 

 


 

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